What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-05-06 compared with 2024-11-01 · 92 added, 133 removed, 237 unchanged (49% of the section changed)

3 unchanged sentences

AND COMPREHENSIVE INCOME

Three Months Ended Nine Months Ended

(in thousands, except per share data) September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

Three Months Ended

(in thousands, except per share data) March 29, 2025 March 30, 2024

Net sales $ 507,692 $ 468,701

4 unchanged sentences

Interest expense, net 7,358 10,605

Other income, net 1,615 605 1,711 1,358

Other (income) expense, net ( 1,361 ) 40

Income before income taxes 74,077 43,793

13 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except for share data) September 28, 2024 December 31, 2023

(in thousands, except for share data) March 29, 2025 December 31, 2024

Current assets:

9 unchanged sentences

Intangible assets, net 272,811 278,213

Deferred tax assets 5,836 5,786

Other assets 47,524 44,878

11 unchanged sentences

Long-term operating lease liabilities 101,451 105,142

Other long-term liabilities 9,203 9,627

Deferred tax liabilities, net 3,710 3,700

Other long-term liabilities 19,403 18,894

Commitments and contingencies (Note 7)

11 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Three Months Ended September 28, 2024

Common Stock Additional Paid-In

Capital Retained

Earnings Accumulated Other Comprehensive Loss Total

(in thousands, except share data) Shares

Balance at June 29, 2024 30,765,672 $ 308 $ 106,714 $ 1,098,506 $ ( 4,208 ) $ 1,201,320

Exercise of stock options 15,269 — 1,207 — — 1,207

Compensation expense under incentive stock plans — — 3,767 — — 3,767

Purchase and cancellation of common stock ( 276,063 ) ( 3 ) ( 497 ) ( 26,499 ) — ( 26,999 )

Issuance of common stock under incentive stock plans, net of cancellations 17,177 — — — — —

Other stock-related activity ( 5,296 ) — ( 596 ) ( 1 ) — ( 597 )

Change in foreign currency translation adjustment — — — — 651 651

Net income — — — 55,253 — 55,253

Balance at September 28, 2024 30,516,759 $ 305 $ 110,595 $ 1,127,259 $ ( 3,557 ) $ 1,234,602

Three Months Ended September 30, 2023

Common Stock Additional Paid-In

Capital Retained

Earnings Accumulated Other Comprehensive Loss Total

(in thousands, except share data) Shares

Balance at July 1, 2023 31,488,164 $ 315 $ 94,452 $ 993,923 $ ( 2,618 ) $ 1,086,072

Exercise of stock options 460 — 37 — — 37

Compensation expense under incentive stock plans — — 2,901 — — 2,901

Purchase and cancellation of common stock ( 2,010 ) — ( 3 ) ( 177 ) — ( 180 )

Issuance of common stock under incentive stock plans, net of cancellations 1,419 — — — — —

Other stock-related activity ( 539 ) — ( 45 ) — — ( 45 )

Change in foreign currency translation adjustment — — — — ( 1,214 ) ( 1,214 )

Net income — — — 40,522 — 40,522

Balance at September 30, 2023 31,487,494 $ 315 $ 97,342 $ 1,034,268 $ ( 3,832 ) $ 1,128,093

Nine Months Ended September 28, 2024

Three Months Ended March 29, 2025

Common Stock Additional Paid-In

10 unchanged sentences

Net income — — — 57,505 — 57,505

Balance at September 28, 2024 30,516,759 $ 305 $ 110,595 $ 1,127,259 $ ( 3,557 ) $ 1,234,602

Nine Months Ended September 30, 2023

Balance at March 29, 2025 30,539,334 $ 306 $ 117,190 $ 1,226,461 $ ( 6,553 ) $ 1,337,404

Three Months Ended March 30, 2024

Common Stock Additional Paid-In

10 unchanged sentences

Net income — — — 32,828 — 32,828

Balance at September 30, 2023 31,487,494 $ 315 $ 97,342 $ 1,034,268 $ ( 3,832 ) $ 1,128,093

Balance at March 30, 2024 31,011,870 $ 310 $ 102,211 $ 1,075,663 $ ( 3,689 ) $ 1,174,495

See accompanying Notes to Condensed Consolidated Financial Statements

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended

(in thousands) September 28, 2024 September 30, 2023

Three Months Ended

(in thousands) March 29, 2025 March 30, 2024

Cash Flows from Operating Activities:

2 unchanged sentences

Depreciation, amortization and accretion 13,843 13,851

Fair value adjustment to contingent consideration — ( 13,400 )

Provision for doubtful accounts 314 11

Provision for deferred income taxes 694 3,319

(Benefit) provision for deferred income taxes ( 46 ) 475

Provision for stock-based compensation 3,613 2,931

9 unchanged sentences

Cash Flows from Investing Activities:

Acquisition, net of cash acquired — 67

Property, plant, and equipment additions ( 10,985 ) ( 10,755 )

3 unchanged sentences

Payments of long-term debt ( 6,250 ) ( 3,125 )

Payment of deferred acquisition consideration ( 200 ) —

Proceeds from exercise of stock options 372 340

12 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 28, 2024 AND SEPTEMBER 30, 2023

FOR THE THREE MONTHS ENDED MARCH 29, 2025, AND MARCH 30, 2024

Basis of Presentation

7 unchanged sentences

In the opinion of management, all adjustments (consisting of only normal recurring adjustments) considered necessary for a fair presentation have been included.

Operating results for the three and nine months ended September 28, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2024 or any future period.

Operating results for the three months ended March 29, 2025, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2025, or any future period.

We may experience significant fluctuations from quarter to quarter in our results of operations due to the timing of orders placed by our customers and the introduction of new products and product lines to customers.

1 unchanged sentence

Sales of Accounts Receivable

We have entered several customer-sponsored programs administered by unrelated financial institutions that permit us to sell (factor) certain accounts receivable at discounted rates to the financial institutions.

Transactions under these agreements were accounted for as sales of accounts receivable and the related accounts receivable were removed from our Condensed Consolidated Balance Sheets at the times of the sales transactions.

We have entered into several customer-sponsored programs administered by unrelated financial institutions that permit us to sell (factor) certain accounts receivable at discounted rates to the financial institutions.

Transactions under these agreements were accounted for as sales of accounts receivable, and the related accounts receivable were removed from our Condensed Consolidated Balance Sheets when sold.

Sales of accounts receivable under these agreements, and related factoring costs, which were included in selling, general, and administrative expenses, were as follows:

Three Months Ended Nine Months Ended

(in thousands) September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

Three Months Ended

(in thousands) March 29, 2025 March 30, 2024

Sales of accounts receivable $ 334,170 $ 285,218

Factoring costs 14,588 13,610

Inventories include the cost of material, freight, direct labor and overhead utilized in the processing of our products and are stated at the lower of cost or net realizable value.

Inventories include the cost of material, freight, duties, direct labor, and overhead utilized in the processing of our products and are stated at the lower of cost or net realizable value.

Inventories were as follows:

(in thousands) September 28, 2024 December 31, 2023

(in thousands) March 29, 2025 December 31, 2024

Raw materials $ 28,854 $ 29,233

7 unchanged sentences

Balance at December 31, 2024 $ 313,704 $ 55,706 $ 73,476 $ 442,886

Measurement period adjustment — — 154 154

Foreign currency translation — 113 — 113

Balance at September 28, 2024 $ 313,704 $ 57,327 $ 72,309 $ 443,340

Balance at March 29, 2025 $ 313,704 $ 55,819 $ 73,630 $ 443,153

Intangible Assets

Intangible assets included the following:

September 28, 2024 December 31, 2023

March 29, 2025 December 31, 2024

Intangible assets subject to amortization Gross Carrying Value Accumulated Amortization Net Carrying Value Gross Carrying Value Accumulated Amortization Net Carrying Value

6 unchanged sentences

Total $ 353,437 $ 80,626 $ 272,811 $ 353,437 $ 75,224 $ 278,213

Amortization expense was $ 6.3 million and $ 5.5 million during the three months ended September 28, 2024 and September 30, 2023, and $ 17.4 million and $ 16.5 million during the nine months ended September 28, 2024 and September 30, 2023, respectively.

As of September 28, 2024 and December 31, 2023, the interest rate on the outstanding borrowings under our credit facility was 6.60 % and 6.96 %, respectively.

Amortization expense was $ 5.5 million and $ 5.6 million during the three months ended March 29, 2025, and March 30, 2024, respectively.

As of March 29, 2025, and December 31, 2024, the interest rate on the outstanding borrowings under our credit facility was 5.67 % and 5.71 %, respectively.

Segment and Geographic Information

Segment results are as follows:

For the Three Months Ended For the Nine Months Ended

(in thousands) September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

Light Duty $ 393,577 $ 374,697 $ 1,138,228 $ 1,076,619

Heavy Duty 59,615 62,841 178,613 199,495

Specialty Vehicle 50,581 50,648 158,584 159,378

Total $ 503,773 $ 488,186 $ 1,475,425 $ 1,435,492

Segment profit:

Light Duty $ 74,632 $ 60,457 $ 198,339 $ 122,917

Heavy Duty 2,660 1,861 5,390 10,595

Specialty Vehicle 8,624 6,840 25,823 23,625

Total $ 85,916 $ 69,158 $ 229,552 $ 157,137

A reconciliation of segment profit to income before income taxes is as follows:

For the Three Months Ended For the Nine Months Ended

(in thousands) September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

Segment profit $ 85,916 $ 69,158 $ 229,552 $ 157,137

For the Three Months ended March 29, 2025

(in thousands) Light Duty Heavy Duty Specialty Vehicle Total

Net sales $ 408,856 $ 51,680 $ 47,156 $ 507,692

Cost of goods sold 236,999 38,477 24,508 299,984

Factoring expense 14,588 — — 14,588

Other segment expenses 75,776 13,366 17,827 106,969

Segment income (loss) from operations $ 81,493 $ ( 163 ) $ 4,821 $ 86,151

For the Three Months ended March 30, 2024

(in thousands) Light Duty Heavy Duty Specialty Vehicle Total

Net sales $ 359,293 $ 57,809 $ 51,599 $ 468,701

Cost of goods sold 216,485 44,568 26,194 287,247

Factoring expense 13,610 — — 13,610

Other segment expenses 71,403 13,232 18,236 102,871

Segment income from operations $ 57,795 $ 9 $ 7,169 $ 64,973

A reconciliation of segment income from operations to consolidated income before income taxes is as follows:

For the Three Months Ended

(in thousands) March 29, 2025 March 30, 2024

Segment income from operations $ 86,151 $ 64,973

Acquisition-related intangible assets amortization ( 5,471 ) ( 5,484 )

1 unchanged sentence

Pretax reduction in workforce costs ( 114 ) ( 4,568 )

Fair value adjustment to contingent consideration — 1,000 — 13,400

Interest expense, net ( 7,358 ) ( 10,605 )

Other income, net 1,615 605 1,711 1,358

Income before income taxes $ 71,124 $ 52,598 $ 177,303 $ 102,145

Other income (expense), net 1,361 ( 40 )

Consolidated income before income taxes $ 74,077 $ 43,793

The following table presents our net sales by geographic region:

Three Months Ended Nine Months Ended

(in thousands) September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

Three Months Ended

(in thousands) March 29, 2025 March 30, 2024

Net sales to U.S.

4 unchanged sentences

Commitments and Contingencies

We have contingent consideration related to acquisitions due to the uncertainty of the ultimate amount of any payments that will become due as earnout payments if performance targets are achieved.

If the remaining performance targets for the acquisitions are fully achieved, the maximum additional contingent payments to be made under the transaction documents would be $ 102.0 million in aggregate.

As of September 28, 2024 and December 31, 2023, we estimated that no such contingent payments are expected to become due in connection with the acquisitions, and therefore accrued no liability.

The contingent consideration liability is measured each reporting period and recorded at fair value.

The inputs used to calculate the fair value of the contingent consideration liability are considered to be Level 3 inputs due to the lack of relevant observable market activity and significant management judgment.

The approach to valuing the contingent consideration uses unobservable factors such as projected revenues and cost of goods sold over the term of the earnout period, discounted for the period over which the contingent consideration is measured, and volatility rates.

Based upon these assumptions, the contingent consideration is then valued using a Monte Carlo simulation.

An increase in future revenue and gross profit may result in a higher estimated fair value, while a decrease in future revenue and gross profit may result in a lower estimated fair value of the contingent consideration liability.

Other Contingencies

We are a party to or otherwise involved in legal proceedings that arise in the ordinary course of business, such as various claims and legal actions involving contracts, employment claims, competitive practices, intellectual property infringement, product liability claims, and other matters arising out of the conduct of our business.

4 unchanged sentences

We grant RSUs, and prior to January 2020 we granted RSAs, to participants in our equity plans.

Performance-based RSUs granted in the nine months ended September 28, 2024 included certain grants that vest based on our total shareholder return ranking relative to the Nasdaq US Benchmark Auto Parts Index over a three-year performance period (market condition), and other grants that vest based upon achievement of return on invested capital targets over a three-year performance period (performance condition).

Compensation cost related to RSA and RSU grants was $ 3.4 million and $ 2.4 million for the three months ended September 28, 2024 and September 30, 2023, respectively, and $ 9.1 million and $ 6.7 million for the nine months ended September 28, 2024 and September 30, 2023, respectively, and was included in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations.

The following table summarizes our RSA and RSU activity for the nine months ended September 28, 2024:

Performance-based RSUs granted in the three months ended March 29, 2025, included certain grants that vest based on our total shareholder return ranking relative to the Nasdaq US Benchmark Auto Parts Index over a three-year performance period (market condition), and other grants that vest based upon achievement of return on invested capital targets over a three-year performance period (performance condition).

Compensation cost related to RSA and RSU grants was $ 3.3 million and $ 2.5 million for the three months ended March 29, 2025, and March 30, 2024, respectively, and was included in selling, general, and administrative expenses in the Condensed Consolidated Statements of Operations.

The following table summarizes our RSA and RSU activity for the three months ended March 29, 2025:

Shares Weighted

3 unchanged sentences

Canceled ( 7,333 ) $ 101.40

Balance at September 28, 2024 343,706 $ 98.56

For the nine months ended September 28, 2024, we granted 32,109 performance-based RSUs containing a market condition with a grant date fair value of $ 138.58 per share.

For the nine months ended September 30, 2023, we granted 29,399 performance-based RSUs containing a market condition with a grant date fair value of $ 113.15 per share.

As of September 28, 2024, there was $ 21.7 million of unrecognized compensation cost related to unvested RSA and RSU grants that is expected to be recognized over a weighted average period of 2.1 years.

Balance at March 29, 2025 361,838 $ 114.75

For the three months ended March 29, 2025, we granted 21,948 performance-based RSUs containing a market condition with a grant date fair value of $ 195.03 per share.

For the three months ended March 30, 2024, we granted 32,109 performance-based RSUs containing a market condition with a grant date fair value of $ 138.58 per share.

As of March 29, 2025, there was $ 33.0 million of unrecognized compensation cost related to unvested RSU grants that is expected to be recognized over a weighted average period of 2.3 years.

Stock Options

From time to time, we grant stock options to participants in our equity plans.

Compensation cost related to stock option grants was $ 0.3 million and $ 0.5 million for the three months ended September 28, 2024 and September 30, 2023, respectively, and $ 1.1 million and $ 1.5 million for the nine months ended September 28, 2024 and September 30, 2023, respectively, and was included as selling, general and administrative expenses in the Condensed Consolidated Statements of Operations.

The following table summarizes our stock option activity for the nine months ended September 28, 2024 :

Compensation cost related to stock option grants was $ 0.3 million and $ 0.4 million for the three months ended March 29, 2025, and March 30, 2024, respectively, and was included as selling, general, and administrative expenses in the Condensed Consolidated Statements of Operations.

The following table summarizes our stock option activity for the three months ended March 29, 2025 :

Shares Weighted

5 unchanged sentences

Exercised ( 3,840 ) $ 96.93

Balance at September 28, 2024 274,701 $ 87.42 4.7 $ 7,187

Exercisable at September 28, 2024 174,775 $ 83.34 4.1 $ 5,284

As of September 28, 2024, there was $ 2.5 million of unrecognized compensation cost related to unvested stock options that is expected to be recognized over a weighted average period of 2.1 years.

Employee Stock Purchase Plan ("ESPP")

During the nine months ended September 28, 2024, we issued 13,555 shares under the ESPP.

During the nine months ended September 30, 2023, we issued 14,975 shares under the ESPP.

Balance at March 29, 2025 228,674 $ 89.31 4.3 $ 7,179

Exercisable at March 29, 2025 177,296 $ 88.16 4.0 $ 5,771

As of March 29, 2025, there was $ 1.7 million of unrecognized compensation cost related to unvested stock options that is expected to be recognized over a weighted average period of 1.7 years.

Earnings Per Share

Basic earnings per share was calculated by dividing our net income by the weighted average number of common shares outstanding during the period, excluding unvested RSAs which are considered to be contingently issuable.

To calculate diluted earnings per share, common share equivalents are added to the weighted average number of common shares outstanding.

equivalents are calculated using the treasury stock method and are computed based on outstanding stock-based awards.

For the three months ended September 28, 2024 and September 30, 2023, there were approximately 214,000 shares and 294,000 shares, respectively, and for the nine months ended September 28, 2024 and September 30, 2023 there were approximately 253,000 shares and 295,000 shares, respectively, that were excluded from the calculation of diluted earnings per share because their effect would have been anti-dilutive.

Basic earnings per share was calculated by dividing our net income by the weighted average number of shares of common stock outstanding during the period, excluding unvested RSAs which are considered to be contingently issuable.

To calculate diluted earnings per share, common stock equivalents are added to the weighted average number of common shares outstanding.

Common stock equivalents are calculated using the treasury stock method and are computed based on outstanding stock-based awards.

For the three months ended March 29, 2025, and March 30, 2024, there were approximately 39,000 shares and 319,000 shares, respectively, that were excluded from the calculation of diluted earnings per share because their effect would have been anti-dilutive.

The following table sets forth the computation of basic earnings per share and diluted earnings per share:

Three Months Ended Nine Months Ended

(in thousands, except per share data) September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

Three Months Ended

(in thousands, except per share data) March 29, 2025 March 30, 2024

Net income $ 57,505 $ 32,828

9 unchanged sentences

401(k) Plan participants can no longer purchase shares of Dorman common stock as an investment option under the 401(k) Plan.

Shares are generally purchased by the Company from the 401(k) Plan when participants sell units as permitted by the 401(k) Plan or elect to leave the 401(k) Plan upon retirement, termination or other reasons.

Shares are generally purchased by the Company from the 401(k) Plan when participants sell units as permitted by the 401(k) Plan or elect to leave the 401(k) Plan upon retirement,

termination, or other reasons.

The following table summarizes the repurchase and cancellation of common stock by the Company for the periods indicated:

Three Months Ended Nine Months Ended

September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

Three Months Ended

March 29, 2025 March 30, 2024

Shares repurchased and canceled 2,070 7,759

1 unchanged sentence

Average price per share $ 126.08 $ 86.77

Separately, our Board of Directors previously authorized the repurchase of up to $ 600 million of our common stock through December 31, 2024 under a share repurchase program and subsequent authorizations (the “Existing Program”).

At September 28, 2024, $ 134.6 million was available for repurchase under the Existing Program.

The Existing Program will expire on December 31, 2024, along with all amounts that remain available for use under the Existing Program as of that date.

Separately, our Board of Directors previously authorized the repurchase of up to $ 600 million of our common stock through December 31, 2024, under a share repurchase program and subsequent authorizations (the “Prior Program”).

The Prior Program expired on December 31, 2024, along with all amounts that remained available for use under the Prior Program as of that date.

In October 2024, the Company’s Board of Directors authorized the purchase of up to $ 500 million of our common stock under a new share repurchase program that is effective from January 1, 2025, through December 31, 2027 (the “New Program”).

Under each of the Existing Program and the New Program, share repurchases may be made from time to time depending on market conditions, share price, share availability and other factors at the

Company’s discretion.

These share repurchase programs do not obligate us to acquire any specific number of shares.

The following table summarizes the repurchase and cancellation of common stock under the Existing Program:

Three Months Ended Nine Months Ended

September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

At March 29, 2025, $ 488 million was available for repurchase under the New Program.

Under each of the Prior Program and the New Program, share repurchases may be made from time to time depending on market conditions, share price, share availability, and other factors at the Company’s discretion.

The share repurchase programs do not obligate us to acquire any specific number of shares.

The following table summarizes the repurchase and cancellation of common stock under the New Program in the three months ended March 29, 2025, and under the Prior Program in the three months ended March 30, 2024:

Three Months Ended

March 29, 2025 March 30, 2024

Shares repurchased and canceled 93,800 310,173

1 unchanged sentence

Average price per share $ 125.99 $ 85.32

At September 28, 2024, we had $ 3.4 million of net unrecognized tax benefits, all of which would lower our effective tax rate if recognized.

Interest and penalties related to uncertain tax positions are recognized in income tax expense and were not material as of September 28, 2024.

At March 29, 2025, we had $ 10.4 million of net unrecognized tax benefits, $ 8.9 million of which would lower our effective tax rate if recognized.

Interest and penalties related to uncertain tax positions are recognized in income tax expense and were not material as of March 29, 2025.

We file income tax returns in the United States, Canada, China, India, and Mexico.

6 unchanged sentences

Related-Party Transactions

Prior to December 1, 2023, we leased our Colmar, PA facility from an entity in which Steven Berman, our Non-Executive Chairman, and certain of his family members are owners.

On December 1, 2023, the Colmar facility was sold to a third party, subject to our lease.

We also lease a portion of our Lewisberry, PA facility from an entity in which Mr.

We lease a portion of our Lewisberry, PA facility from an entity in which Mr.

Berman and certain of his family members are owners.

The Colmar lease was, and the Lewisberry lease is, a non-cancelable operating lease.

The Lewisberry lease expires December 31, 2027.

The Lewisberry lease is a non-cancelable operating lease and expires December 31, 2027.

We also lease our facilities in Madison, IN, and Shreveport, LA, from entities in which Lindsay Hunt, our President, Specialty Vehicle, and certain of her family members are owners.

Each lease is a non-cancelable operating lease, was renewed in October 2022 in connection with the acquisition of Super ATV, LLC, a leading supplier to the powersports aftermarket ("SuperATV"), and will expire on October 31, 2027.

Each lease is a

non-cancelable operating lease, was renewed in October 2022 in connection with the acquisition of Super ATV, LLC, a leading supplier to the powersports aftermarket ("SuperATV"), and will expire on October 31, 2027.

We have service agreements with counterparties that are majority-owned by a family member of Ms.

3 unchanged sentences

(in thousands) December 31, 2025 December 31, 2024

Facility leases with Steven Berman related entities $ 715 $ 2,918

Facility leases with Lindsay Hunt related entities $ 2,757 $ 2,603

Service agreements with Lindsay Hunt related entities $ 54 $ 200

Facility leases with entities related to Steven Berman $ 735 $ 715

Facility leases with entities related to Lindsay Hunt $ 2,812 $ 2,757

Service agreements with entities related to Lindsay Hunt $ 46 $ 54

We are a partner in a joint venture with one of our suppliers and own a minority interest in two other suppliers.

1 unchanged sentence

Fair Value Disclosures

The carrying value of financial instruments such as cash and cash equivalents, accounts receivable, accounts payable, and other current assets and liabilities approximate their fair value based on the short-term nature of these instruments.

The carrying values of financial instruments such as cash and cash equivalents, accounts receivable, accounts payable, and other current assets and liabilities approximate their fair value based on the short-term nature of these instruments.

The carrying value of borrowings under our credit facility approximates fair value because these borrowings bear interest at rates indexed to a market rate (Term SOFR).

New and Recently Adopted Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) 2023-07, Improvements to Reportable Segment Disclosures.

The ASU requires additional disclosures about reportable segments’ significant expenses on an interim and annual basis.

The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 on a retrospective basis.

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures.

The ASU expands disclosures in the income tax rate reconciliations table and cash taxes paid, and is effective for annual periods beginning after December 15, 2024.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses.

The ASU requires additional disclosures about categories of expenses, including, among other things, quantitative disclosures for employee compensation, depreciation, intangible asset amortization, selling expenses, and purchases of inventory.

The updated guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027.

We expect to implement these new standards by their effective dates, and do not expect their adoption to have an impact on our results of operations, financial condition, or cash flows.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements